In a move that can only be seen as a bold one to boost renewable fuels north of the border, the Canadian government has pledged to put $500 million into development of fuels from renewable sources.

This story from The Canadian Press says the money is going to be put in a development fund managed by Sustainable Development Technology Canada:

The fund will support up to 40 per cent of eligible costs for the establishment of new, large demonstration facilities for production of the fuels.

Contributions will be repayable, based on free cash flow over a 10-year period after completion of the project.

The news is being welcomed by the Canadian Renewable Fuels Association, which says it will build on the environmental and economic benefits of fuels such as ethanol and biodiesel.